Oil Price Drop Kills Electric Car Sales?

You are probably aware of the massive drop in the price of crude oil. It started before Christmas and it continues to fall.

This can only mean one thing, electric car sales will plummet, people will start buying bigger cars with bigger engines because petrol and diesel will be dirt cheap. Forever.

We all know that, once the price of oil goes down, it stays down, forever.

Oh wait, I’ve just remembered, no it doesn’t. It goes up again just as sharply, then down again, then up.

Gasoline Price vs Electricity Price (Image: EEI)

It’s a highly volatile market which keeps financial journalists busy so that’s good for them.

So why did the price of oil go down?

Oh yes, fracking. Of course, if only the namby-pamby-greenie-weeny-nimbies would allow this government and their mates to frack the hell out of Berkshire we’d have almost free oil and gas forever.

Except of course we wouldn’t, and now it seems even more unlikely.

Here’s an idea.

The tar sands in Alberta, the gas and oil in shale rock thousands of meters beneath the surface, geologists and oil companies have known about that stuff for decades, it’s only recently been financially viable to extract it because the oil price has been so high.

So extract it they did, they had a bonanza! Woop-de-doodie.

Then some chaps in Saudi Arabia noticed a bit of drop in demand for sweet crude (that’s a proper term by the way) and they said, ‘either we turn off the taps and make do with several billion dollars a day less than we’re used to, or we flood the market and put all the tar sands dudes and frackers out of business overnight.’

They did the latter.

It is now economically ridiculous to spend the amounts of money and energy to extract tar sands, fracked oil and all the associated problems that go with this absurd, last gasp effort to keep burning fossils. The fossil companies are moaning, they want more tax breaks or they’ll go out of business. Naturally they have the full support of the public….. not.

And interestingly this massive temporary reduction in the oil price has had no effect on electric car sales, they just keep going up.

It’s still tiny, it’s still a fraction of the total but the increases are in the 100’s of % per year.

Because as anyone with two brain cells is aware, people don’t buy electric cars just because petrol is expensive or cheap. There are hundreds of reasons, the main one being that the technology is more interesting, impressive, reliable and it is possible to make your own fuel.

That’s disruptive, that’s upsetting to the entrenched and well defended monopolies that govern us…. via the governments they pay for.

So I would suggest that electric car sales will not be affected by the drop in the price of oil.

As I always say, electric cars won’t save the world, but they might be pointing in a direction we should all be looking at.